Norwegian Kronor

The Norwegian Krone was again an underperformer among major currencies ahead of Thursday’s monetary policy decision from the Norges Bank, which could be more of an upside risk to the oil-linked currency than is commonly appreciated.

The Norwegian Krone meandered along the middle of major currency road Tuesday but could accelerate through the 2021 rankings this summer as Europe frees itself from a coronavirus vaccination mire, a global economic upswing lifts oil prices and the Norges Bank raises interest rates before any of its peers.

The Norwegian Krone was a middle of the road performer among major currencies on Thursday, enabling GBP/NOK to arrest an earlier decline as the Nordic currency took in its stride suggestions from the Norges Bank that it could begin lifting interest rates before the year is out. 

The Krone is already the New Year's best performing major currency thanks to a superior set of economic and financial fundamentals but occasional bouts of weakness in oil price are likely to offer investors further opportunities to buy the Norwegian currency on dips in the year ahead, according to ABN Amro.